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Cohabitees now to benefit when a loved one dies

cohabiteesAccording to a new law now passing through Parliament, people who cohabit will benefit when their life partner dies, provided that they have lived together for a reasonable period. At the current time, cohabitees have no right to anything on death, unless they claim through the Courts. Now, after a few years together, they will be treated much like a married couple, with similar rights on death, where there is no Will.

Cohabitees will still need to make a Will to provide full protection for their partner and any children, even if the reforms are made.
The Law
The proposed new law is called the Inheritance (Cohabitants) Bill. It will make some provision for a loved one, even if a couple is not married, but only after a period of time together. The two options in terms of a cohabiting couple are provisionally as follows:
1.       5 years where there are no children of the relationship
2.       2 years where there are children of the relationship
The couple will need to be living together at the time one of the couple dies, if the surviving partner is to benefit.    Further, the two year rule will only apply if the child is still living with the couple when
the death occurs.  
How much will a Cohabitee receive?
A cohabitee will receive the first £250,000 of the deceased's estate if they meet the conditions. They will also receive an income from half the rest of the estate. This will mean that half the remainder is held in trust, with the income coming from that half. Where the estate is mostly property, the trust will give the survivor the right to life there.
This is the same as the current position for a married couple.
It is not yet certain that the bill will become law.   More likely, though, it will be passed with a few amendments. 
At the moment, around a half of couples under the age of 35 cohabit, so it is a fact of life.
Married Couples
Married couples will still be in an easier position on intestacy. A surviving spouse automatically has an entitlement on death, even if the marriage is only a day old.   The proposed 2 year and 5 year rules leave the position of cohabitees more complicated and less helpful than that of married couples on death.
Cohabitees:  What to do?
Whether or not this new provision goes ahead, the best advice to all cohabitees is to put in place everything you need to protect your partner.
This includes:
  • A Will to protect your partner on death, and avoid the need for an expensive claim
  • A Lasting Power of Attorney so that your partner can manage your affairs if you lose your capacity to manage your affairs yourself 
  • Protection from inheritance tax, as there is no exemption from this tax for cohabitees
  • Possibly a declaration of trust in relation to your property, or a cohabitation agreement, or both, to set out who has what on separation. 
In general, the law does not provide for cohabitees, and the new rules will only change this principle in the context of intestacy for some couples. It is advisable for cohabitees to put things in place for themselves, and not to rely on the law.
For most married couples, a Will is also advisable, as intestacy does not provide fully for a surviving spouse, and is not satisfactory where young children are concerned.

For a Will, try our Quickwills website. Or contact Ben Lowe, our head of Probate, for advice on Wills, Lasting Powers of Attorney, or claims on death.

Added Thursday 19th July